KEDM Lite Vol. 16
This week’s additions and highlights 1. SPIN-OFFS Hexagon (HEXAB SS). Hexagon provided additional financial and organizational information for its upcoming Octave spin-off. The unit’s results have been under pressure over H1 25 but sported >30% ebit margins in 2024 and 27% in H1 25. Let’s hope for some interesting action after the spin. UPDATE (February…
Q1 Hedge Fund letter insights
Fund Letters As a matter of tradition, fund managers write to their LPs once a quarter to update them on the fund’s performance. The format is ubiquitous and has changed little over the years. It starts with some words on performance, followed by Buffett quotes in the event of prolonged underperformance. Then we get the…
KEDM Lite Vol. 15
This week’s additions and highlights 1. SPIN-OFFS S&P Global (SPGI US). A reminder of the upcoming spin of S&P Global’s Mobility division. This is a high-quality asset with little overlap with SPGI’s core business, guided by 7.5%-10% organic revenue and 8-11% EBITDA growth. So, the spin seems to make sense and should unlock value. However,…
Up in the air
Up in the air Back in June of 2023, we wrote about the resurgence of air travel following 3 years in which in-person events were canceled, and we all had to talk to our colleagues over Zoom. During the pandemic, the manufacturing of new airplanes had ground to a halt, but we believed production was…
KEDM Lite Vol. 14
This week’s additions and highlights 1. SPIN-OFFS Corteva (CTVA US). Corteva recently confirmed the Q4 separation of Seeds (Vylor) and Crop Protection (New Corteva), with dis‑synergies cut to $50m. This in itself is an attractive catalyst given the different business dynamics. Seed volumes were boosted by timing shifts and strong North American demand, and Crop…
Gangnam Style
Korea’s shareholder reforms are real. Korea’s KOSPI benchmark index has been on a tear. In the past year, the index has essentially tripled on the back of the success of SK Hynix, Samsung Electronics, and other Korean ‘AI bottleneck stocks’ that everyone is piling into. However, if you look beyond the KOSPI index, there’s still…
KEDM Lite Vol. 13
This week’s additions and highlights 1. SPIN-OFFS Essity (ESSITYB SS). Essity is considering a separation / spin of its Consumer Tissue unit. Is it finally going to happen? The Tissue business is rough, there’s not much growth and operating margins are much below the group average. A separation has long been discussed and makes sense…
European Defense
European Defense While Americans like to talk about Europe as one nation, the continent has always been greatly divided. The cultural differences are vast. In the eyes of their neighbors, the Dutch are cheap and too direct, the Germans have no sense of humor, the French are arrogant, the Spaniards are lazy, the Italians are…
KEDM Lite Vol. 12
This week’s additions and highlights 1. SPIN-OFFS Textron (TXT US). Generally, it is too large for a KEDM Lite flag, but there’s just so much going on a Textron. They recently announced to be looking to spin the industrials arm and reposition as a pure‑play defense company. Obviously strong tailwinds. A reminder that Textron is…
The dire state of the US consumer
The times when US consumers were flush with COVID stimmies while at the same time they had too much time on their hands seem like a distant past. In 2023 we started reading up on higher-quality consumer companies ahead of a recovery, which we thought was inevitable. But so far, every year has surprised to…